Hubbell Policies

C. 2-way Match shall mean a 2-way match is where the Purchase Order (PO) quantity and price and the Invoice Receipt (IR) quantity and price are compared prior to processing of the invoice. Invoices for Service POs do not require a Good Receipt (GR). In the 2-way match process all purchase orders are subject to threshold requirements to determine whether or not additional approvals are required prior to processing. Manual workflow is in place to route invoices for approval prior to payment processing. (Note: Technology is being evaluated to automate approval process.) All purchases of Indirect Services will be processed through 2-way matching. D. Tolerance shall mean tolerances are ranges set up within SAP to determine whether discrepancies in the invoice matching process either pass through directly for payment processing or are placed on hold for further review. The tolerance levels have been set by the Company Code Controller or Group Controller based on policies of the Group. Current tolerance levels for both quantity and price are documented in Appendix 1. E. Threshold shall mean thresholds are dollar value limits set within SAP to enable auto-processing of low value invoices. For the 2- way matching, thresholds are setup to control the invoice approval process. Invoices with a value under the defined threshold will be processed and paid automatically – defined as auto-match. Invoices with a value greater than the threshold will require an approval from the requestor of that service. An approval matrix is defined and follows the business rules for approval routing and workflow. Such invoices are released for payment upon approval only. F. MRBR shall mean is a queue in SAP that contains invoices that have been posted into SAP, but the matching discrepancies are outside of set tolerance levels for quantity and/or price and for items above threshold limits. The items in the MRBR queue are blocked / prevented from payment being issued to the supplier until the issue is resolved and the invoice block is removed. G. Purchase Types shall mean classifies spend into the categories of “goods” or “services”. Goods are tangible, consumable items; whereas services are tasks performed by an individual or company for the benefit of another. Purchase types are used in conjunction with material groups to determine the type of invoice matching required for payment. H. Material Groups shall mean groups that are categories in which spend is classified. There are two groups, Direct and Indirect, which determine how invoices are processed. Direct materials, materials directly used in the production process, are grouped into 16 categories (i.e. 236 material groups). Indirect materials or services, all other purchases not used in the production process, are categorized into 98 material groups. Appendix 2 shows the material groups available and associated category manager or buyer for each category/group. I. Invoice Types shall mean the following types of invoices are processed by Hubbell Accounts Payable Department: Purchase Order (PO) Goods and Services, Non-Purchase Order (FB60) Goods and Services, EDI (Electronic Data Interchange), ERS (Evaluated Receipt Settlement), Consignment, Freight, Taxes, Intercompany and Miscellaneous (Employee reimbursements, commissions, royalties) J. ERS shall mean the acronym for Evaluated Receipt Settlement. The Evaluated Receipt Settlement process in SAP is a process that creates a settlement document that is equivalent to an invoice. The information creating the invoice is derived from the Purchase Order and the Goods Receipt for price and quantity. The settlement documents are generated in a nightly batch in SAP but can also be initiated manually. The settlement document contains all items received from the last settlement process to current settlement process. The supplier does not submit invoices for ERS items.

K. Tangible shall mean any indirect or direct item that is physically delivered to the site

L. Intangible shall mean any service performed. Items not delivered to the plant site may be intangible for receiving poses.

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