{"id":3924,"date":"2019-05-28T13:42:11","date_gmt":"2019-05-28T13:42:11","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=3924"},"modified":"2022-09-02T09:11:17","modified_gmt":"2022-09-02T09:11:17","slug":"using-evaluated-receipts-settlement-in-p2p","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2019\/05\/using-evaluated-receipts-settlement-in-p2p\/","title":{"rendered":"Using Evaluated Receipts Settlement in P2P"},"content":{"rendered":"

Introduction<\/strong><\/span><\/p>\n

Many are familiar with the book, Reengineering the Corporation, by Hammer and Champy, published in 1993, which cited Ford Motor Company\u2019s ability to eliminate 75% of their AP staff by implementing Evaluated Receipts Settlement (ERS) as an example of the fundamental rethinking and radical redesign companies must undertake to drive large scale improvement<\/a>.\u00a0 While the idea made for great theater, the reality of achieving a process where payments are automatically based on the receipt of direct materials, with no effort in the purchasing company\u2019s Accounts Payable<\/a> department or the supplier’s Accounts Receivable department, isn\u2019t easily achieved.\u00a0<\/span><\/p>\n

Today, companies implementing ERS typically leverage EDI, with the use of Advance Ship Notices and clear remittance advice files so that any discrepancies between payments expected and payments made can be quickly identified and resolved.\u00a0 While this topic was the \u201cbuzz of the day\u201d in the 1990s, today many companies are continuing to achieve real benefits by eliminating invoices from the Accounts Payable process.\u00a0 Properly implemented, the benefits of ERS are real and tangible and, for companies processing receipts<\/a> for direct materials, a normal and natural part of the Purchase-to-Pay process.<\/a><\/span><\/p>\n

Recently, several member companies that use ERS extensively were featured on a PeercastTM<\/sup> to share their experiences and answer questions from other Peeriosity members. \u00a0Peeriosity members are encouraged to listen to the PeercastTM<\/sup> recording posted on the Peeriosity member website.<\/span><\/p>\n

iPollingTM<\/sup> Results Review<\/strong><\/span><\/p>\n

To support the PeercastTM<\/sup>, a Peeriosity iPollingTM<\/sup> question was created to provide insight regarding how companies use ERS.\u00a0 Reviewing the results, 55% of Peeriosity member companies have either less than 10% or none of their payment transactions made via ERS, with 35% reporting over 30% of payment transactions being related to ERS.\u00a0<\/span><\/p>\n

\"iPolling:<\/p>\n

The second question in the poll asked about the importance of ERS, with 60% of responses indicating that ERS is an important process that either is being maintained at a constant level or efforts are underway to increase usage.\u00a0 ERS isn\u2019t a good fit for every industry, with 28% indicating that ERS isn\u2019t used for a variety of reasons.\u00a0 Here are the details:<\/span><\/p>\n

\"iPolling:<\/p>\n

Listed below are several of the comments from responding companies:<\/span><\/p>\n