ACCOUNTS RECEIVABLE - PURCHASE ORDER

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ACCOUNTS RECEIVABLE - PURCHASE ORDER

  1. 1. PURCHASE ORDER <br />April 2011<br />Accounts Receivable<br />Application and Infrastructure SolutionsAustralia | Canada | France | Germany | India | New Zealand | Singapore | Switzerland | UAE | UK | USA<br />
  2. 2. Contents<br />1<br />
  3. 3. Purchase Order – An Introduction.<br />2<br />2<br />
  4. 4. What Is A Purchase Order (PO)<br />3<br />
  5. 5. Information On A Purchase Order (PO)<br />Who Issues a Purchase Order?<br /><ul><li> Either a Purchasing Agent or a Purchase Department.</li></ul>Information On A Purchase Order?<br /><ul><li> It contains description of services, quantity, agreed rate, total cost, payment terms, delivery date and also includes contact information/address.
  6. 6. The most important item regarding a PO, is the unique number of the PO. This number will be used to track project deliverables, milestone achieved (if any), amount paid etc.</li></ul>4<br />
  7. 7. Purchase Order – Why Demanded?<br />5<br />5<br />
  8. 8. Reasons For The Demand Of PO<br />6<br />
  9. 9. Purchase Order – Advantages. <br />7<br />7<br />
  10. 10. Advantages At A Glance<br />8<br />
  11. 11. Purchase Order – Workflow.<br />9<br />9<br />
  12. 12. PO Process Flow<br />If Yes<br />Purchase Department<br />A<br />Management’s<br />Approval<br />Start<br />‘X’ Service<br />Client<br />If No<br />Stop<br />Vendor 1<br />End<br />PO Allotted<br />Project Setup & SOW<br />A<br />Vendor 2 (Ex: Keane)<br />Vendor 3<br />Contents of SOW - <br /><ul><li> Billing Terms
  13. 13. Billing Address
  14. 14. Payment Terms
  15. 15. Nature of Project etc. </li></ul>10<br />
  16. 16. Purchase Order - Fact Sheet.<br />11<br />11<br />
  17. 17. % of PO Driven Clients - UK<br />12<br />
  18. 18. Collection Against Overdue - UK<br />13<br />
  19. 19. Collection Against Overdue (PO Driven Clients) - UK<br />14<br />
  20. 20. % Of Disputed Invoice Against Overdue (PO Driven Clients) - UK<br />15<br />
  21. 21. Issues With Purchase Order.<br />16<br />16<br />
  22. 22. Issues With Purchase Order<br />Insufficient Fund in PO – <br />Case 1.When single PO is allotted for a single project:<br /><ul><li>Insufficient funds in PO but still billing went ahead and raised an Invoice.</li></ul>Case 2.When there are multiple PO’s allotted in a project:<br /><ul><li> Suppose Billing generated an ABC Invoice of $20k ($10k from PO 1, $5k from PO 2 & another $5k from PO 3) but funds are only available in PO 1 and PO 2. As a result, the Invoice generated will be rejected by the client. </li></ul>Project<br />PO 3<br />2,000<br />PO 1<br />10,000<br />PO 2<br />5,000<br />17<br />
  23. 23. Issues With Purchase Order Contd..<br />PO Closed – <br />Case 1.When single PO is allotted for a single project:<br /><ul><li>Timeline allotted to a PO expired but still billing went ahead and raised an Invoice.
  24. 24. Fund allotted to a PO received but still billing went ahead and raised an Invoice. </li></ul>Case 2.When there are multiple PO’s allotted in a project:<br /><ul><li> When particular timelines allotted to the PO’s has expired but still billing went ahead and raised an Invoice then the Invoice will be rejected by client.
  25. 25. Suppose we have already received payment of $20k from client and the PO’s has been closed. But still billing went ahead and raised an Invoice against the closed PO’s. </li></ul>Project<br />PO 3<br />5,000<br />PO 1<br />10,000<br />PO 2<br />5,000<br />18<br />
  26. 26. Issues With Purchase Order Contd..<br />Wrong PO – <br />Case 1.When single PO/multiple PO’s are allotted against project/s:<br /><ul><li> When billing raised an Invoice against a wrong PO either due to manual error or against an already closed PO.
  27. 27. Change request (CR) from delivery team has not been received.
  28. 28. CIPI Team failed to update the change request.</li></ul>The above mentioned are the major three Issues related to PO.<br />19<br />
  29. 29. Purchase Order – Implications.<br />20<br />20<br />
  30. 30. Purchase Order - Implications<br />21<br />
  31. 31. Purchase Order - Possible Resolutions.<br />22<br />22<br />
  32. 32. Purchase Order - Possible Resolution<br /><ul><li> A PO Tracker needs to be maintained by billing team to track down all the relevant PO details because PeopleSoft does not support multiple PO’s.
  33. 33. In case of a single PO, most of the required details can be tracked through PeopleSoft.
  34. 34. Billing team can generate excel report through PO query including all relevant information (such as – PO number, PO amount, amount of billing already generated)
  35. 35. Here Issue arises when PO is not set-up into the system, then it becomes difficult for billing team to track PO’s.
  36. 36. The resolution requires continuous follow-up with delivery team and CIPI team to avoid any complexities and misunderstandings.</li></ul>23<br />
  37. 37. Thank You.<br />Presentation By:-<br />Ravi Singh.<br />Preeti Arora.<br />Swadha Mishra.<br />Questions?<br />

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