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Coupa Success Portal

Mid Size Starter Package Invoicing

Use Cases

Running through various Invoicing Workshops, we can see that the same requirements appear again and again. Or because current processes or systems are used for a long time, we are asked for best practices.

As a result, we have built this starter package for invoicing that covers several best practices for PO and non-PO related invoices.

In this starter package we do not use goods receipt processes instead we build on a 4-eye principle to approve invoices via workflows.

For PO-based invoices this is applied via the PO for the financial approval and a factual approval against the requester for the verification that goods or services are properly received and consumed. (this is a requirement if you want to reclaim VAT)

For non-PO-based invoices this is applied via the factual approval followed by the financial approval. Approvers are derived via the billing string lookup values.

In addition to allow the implementation to operate differently in different areas, a region information is kept with all master data that allows to separate approval chains for regions without creating chains for every COA.

Considerations

The provided best practice delivers an environment, that can be easily configured and loaded and help to build quickly a usable invoicing system with pre-defined COA and approval logic that can be enhanced and modified in customer sessions.

Advantage is to come with a best practice design into workshops and have something to load into the sandbox environment of customers that can directly be used in workshop to show best practice in action.

Additional items to take into consideration are:

  • Do you require goods receipt to be booked for accrual or ERP booking reasons (in this case use this as a basis and enhance with GR best practices)
  • Do you build on delegation of your requesters? (if this is the case, please refer to Step 11: Invoice Requester Access on current limitations)
  • Do you build your approvals on a hierarchy or do you have a matrix organization? (in case of hierarchy, please refer to Step 9: Approvals for more information)

 

Regional/Country Specific Considerations

Starter Package is mainly designed around VAT/GST requirements, as these require factual approvals and 4-eyes principles. But concepts in this design can be reused globally.

Do's & Don'ts

Try to drive towards a best practice that can be easily supported by Coupa instead of letting the customer ask for all the legacy process that have been implemented long time ago, are rarely used and create major problems in the system design.

Design Element Recommended Design Alternative Design Risky Design Rationale
Requester Access Step away from "Edit as Approver" Role Options towards the new requester access, knowing that delegation is currently not supported   If delegation is required, "edit as approver" needs to be used again but has additional risks Requester access is more granular in its rights to individial objects of an invoice and is the path going forward for Coupa
Factual Approval do not use goods receipt, instead us a factual approval step in workflow build design to support 3-way matching via goods receipts and superseed the approval with a GR booking Values inconsistent across users (when core design is not management hierarchy) Typically mid size companies have troubles usiing the GR concept and staff is more used to review and code an invoice than booking a GR into a tool. improves process efficency and user adoption.

Heat Map Assessment

 

Screen Shot 2021-06-02 at 4.14.06 PM.png

Mid Size Package will not be used for given project Mid Size Package is incorporated into the current design and the design is fully defined (all design elements determined).  Customer is still determining use cases for Mid Size Package One or more Risks are incorporated into the current design of Mid Size Package  

Related Success Metrics and Value Drivers

  • Approval Cycle Time
  • Avg. Number of Approvers per Transaction
  • Tax Compliance

If these are key metrics for a customer's business, enabling self approvals could make a significant impact to these values while not leveraging this feature may be a risk in itself. 

Design Assumptions

To allow the straightforward loading of the invoicing principles, we have made several assumptions that need to be amended on a per need basis:

  • Approvers are selected based on lookups related to the cost object and a corresponding approval limit to mirror a matrix organization.
  • Financial non-PO Invoice Approvals target a 4-eye principle.
  • Approvals follow the following processes:
    • PO
      clipboard_e6dae5be4cbc16eaaeb956f18bebc5766.png
    • Non-PO
      clipboard_ec5eb8035aa76ca6a5d92ac3b7a63d436.png
    • Credit Note
      clipboard_e97c34989880369bbac764ecc096c64ac.png
      General Credit Note Process Assumptions:
      clipboard_e461eefa2be3c26ed00979aa2bda5708b.png
    • Asset
      clipboard_ef4b74c9f227307ce6350fd233f2720a8.png

Data elements also contain additional data elements that steer workflows:

  • Commodities
    • GL Account - Text Field to preset GL coding in PRs and Invoices
    • Asset? - Checkbox to indicate of commodity possible relates to an asset item
       
  • Suppliers
    • COA Content Group - Text Box that allows to link a supplier to the COAs the supplier is enabled for in invoicing. As many ERP systems require to enhance the supplier to a specific cost center, here it can be checked, that the COA/Company Code is already enhanced to this supplier. Comma separated list, with company codes.
    • Auto Posting - Check Box, allows to steer a final step in workflows to include AP again in the process to review the invoice. Especially for new suppliers this can be helpful to see if invoice is properly created and coded before sending to ERP. When flag is disabled, the invoice do not stop with AP any more
       
  • Users
    • Region - Drop down to capture different environments and their needs in workflows. Can be per Country, per Company Code, or other criteria, Initial setup is per Country.
       
  • Lookups
    • CostObject Owner – User that defines the primary financial approver for a cost element (cost center, project, profit center)
    • CostObject Owner Supervisor – Manager of primary financial approver (when hierarchy is not used) to enable 4-eye principle. If the cost object owner is also the requester in this case the Supervisor will take over to additional approve on top of the requester.
    • Workflow Validation Value – Text repeats the value in the ExternalRefNum field of the lookup value. Is used for verifications in approval chains to not to need individual chains per COA.
       
    • Region – Drop Down specifies the area approval chains should belong to. This way there is no need to specific approval chains per COA which reduces the number of chains dramatically.
       
    • Type – Text Field provides additional verification data to a lookup, e.g. for GL codes there is often a difference between cost center and profit center bookings. This way it can be verified if the right ones are taken.
       
  • Requisition/Purchase Order/Invoice Header
    • Pre/recurring-Payment agreed – Drop Down allows to indication and booking of specific invoice types like pro-forma, pre-payment, down payment etc in the ERP systems. Fields on PR and PO can be superseded with the new pre-payment functionality on orders.
       
  • Purchase Order/Invoice Line
    • Asset? – Checkbox taken from Commodity drives additional process to verify if purchased item is related to assets.
       
  • Invoice Header
    • Mandatory Attachment – Attachment to steer users to add required document for specific processes at invoice approval time, e.g. participants list, timesheets, etc.
    • Compliance Check done – checkbox to indicate that all compliance related activities have been done by AP team
    • Process Status Invoice – Lookup to track additional sub tasks, e.g. when an invoice is rejected or draft and needs further acting
    • Auto Posting - Check Box, inherits from supplier, allows to steer a final step in workflows to include AP again in the process to review the invoice. Especially for new suppliers this can be helpful to see if invoice is properly created and coded before sending to ERP. When flag is disabled, the invoice do not stop with AP any more
    • Special Supplier – lookup to steer other approval processes than the default one, e.g. for utilities or telephone where you do not want all the cost center approvers to approve. Requires one workflow per special approver entry in the lookup.
    • COA Content Group - Text Box that allows to link a supplier to the COAs the supplier is enabled for in invoicing. As many ERP systems require to enhance the supplier to a specific cost center, here it can be checked, that the COA/Company Code is already enhanced to this supplier. Comma separated list, with company codes.
       
  • Invoice Lines
    • Asset Tag – text field to capture tag number when item is seen as a asset.
       

Target design is also that non-po invoices after submitted by AP do not go into Pending Action but directly into pending approval to the requester. To achieve this, “dummy” values are loaded into the billing string and the requester cannot continue without changing these dummy values into correct billing strings. Granular Requester Control is used to force proper security. 

COA builds on 3 Segment Levels

  • Cost Object in Level 1
  • Cost Center / WBS / Profit Center dependent to Cost Object in Level 2
  • General Ledger (Cost Account) in Level 3

How to configure

If you set your regions by country, replace XX with the country code, otherwise replace with any other categorization you have decided to choose.

Remark, please use the CSV files provided in the ZIP file attached to load pre-configured data in every step of the configuration process. File Numbers align with config steps.

Step 1: Content Groups

Create the following Content Groups using the attached CSV file, in there, replace XX with your region indicator

  • XX Accounts Payable
  • XX Admin
  • XX Procurement
  • XX All

Step 2: Roles

Create the following Roles manually, replace XX with your region indicator, then use the attached CSV Files to configure the roles

  • XX User
  • XX Accounts Payable
  • XX Accounts Payable Supervisor

Step 3: Groups

Create the following Groups using the attached CSV file, in there, replace XX with your region indicator. Test users will be assigned to these Groups via the Step 6: Users later in the process.

  • XX Accounts Payable
  • XX Purchasing
  • XX Assets
  • XX Event Accounting
  • XX Tax Accounting

Step 4: Lookups

Create the following Lookups using the attached CSV file, in there, replace XX with your region indicator and YYYY with your company code

  • GL Invoice Process Status
  • GL Special Supplier
  • XX COA YYYY SEG 1 OBJ CTR WBS
  • XX COA YYYY SEG 3 GL

Step 5: Custom Fields

As custom fields cannot be loaded, please use the screenshots provided here to create the required custom fields. Please follow the sequence given below as some fields have dependencies.

 

  • Commodities
    • GL Account – Text Field
      clipboard_e9a6a3bbca8a9cc1f150b65f23d9b05ca.png
    • Asset – Check Box
      clipboard_ef6d1fd75eccde90a2eb18a3000c6b5e1.png
       
  • Supplier
    • COA Content Group – Text Box
      clipboard_ec2d3fd0ac63d1bd36aa3289b846e8f8c.png
    • Auto Posting – Check Box
      clipboard_e418dfd8c410352624f447d4c131a1992.png
       
  • User
    • Region – Drop Down
      clipboard_ed022962000cf2b5a7edf564ba562b4f7.png
       
  • Lookup Values
    • CostObject Owner - User
      clipboard_e6e0a52977a94be4892834802b06f1c29.png
    • CostObject Owner Supervisor – User
      clipboard_e5395baacd5d609dc66830be1dab21ec8.png
    • o   Workflow Validation Value – Text
      clipboard_e52452dda2671fa45a490ef57adfa1d67.png
    • Region – Drop Down
      clipboard_e0ceb7909993215c6cca350a575e2a5c8.png
    • Type – Text
      clipboard_e09baef5cf842798e068a9407537a6f5d.png
       
  • Requisition
    • Pre/recurring-Payment agreed – Drop Down
      Yes/Ja (1)
      clipboard_ecbdb5660c7795d1e5010d5605abcaefa.png
  • Purchase Order
    • Pre/recurring-Payment agreed – Drop Down
      Yes/Ja (1)
      clipboard_eea87a252490ede2d971d34dd6d8d1673.png
       
  • Purchase Order Line
    • Asset? – Checkbox
      clipboard_e0fc0dcb0a73be5b08479755a7ca5d9c7.png
  • Invoices
    • Mandatory Attachment – Attachement
      clipboard_ed321a12b66fc26547acbdef4270fd5df.png
    • Compliance Check done – Check Box
      clipboard_eb3b007a06e914b9a72f065696f367115.png
    • Process Status Invoice - Lookup
      clipboard_ed09a78270f552e208432349c78f44c75.png
    • Auto Posting – Check Box
      clipboard_eab82146eb87893eb168469680b0082be.png
    • Special Supplier – Lookup
      clipboard_ec60fcc8e81f256959b6315ebee56d3ee.png
    • Pre/recurring-Payment agreed – Drop Down from PO
      Yes/Ja (1)
      Pre-Payment/Anzahlung (2)
      Final Invoice/Finale Rechnung (3)
      Recurring Payment/Zahlungsplan (5)
      No/Nein (4)
      clipboard_ea60efad1faa7c2ba48b4dfcc9a640a8d.png
    • COA Content Group – Text Box
      clipboard_e2922c9f3c166c796925df862cace6764.png
       
  • Invoice Lines
    • Asset? – Check Box
      clipboard_e19b7b57e17dd86fccdf235af213b2660.png
    • Asset Tag – Text Field
      clipboard_e817ec95a82053b3c4529b32003b27441.png

Step 6: Users

Create the following Users using the attached CSV file, in there, replace XX with your region indicator. All Test Users have the user role, on top of that Test User 10 has the Accounts Payable Role and Content Group and Test User 4 has the Accounts Payable Content Group. In addition Test User 4 belongs to the Assets approver group and Test User 10 to the Accounts Payable, Event Accounting and Tax Accounting approval groups.

If more users are needed please add them to the CSV file and assign Roles, Content Groups and Approval Groups accordingly.

  • XX_Test_User_y (1-y times)

Step 7: Lookup Values Loads

Create a number of lookup values for cost centers, projects and GL accounts in relation to the test users to allow approval chains to work. User them as example how future values should be integrated. Use file “07 Lookup OBJ CTR WBS Load”

Step 8: COAs

Use file “08 COA Load” to generate the default 3 segment COA structure. If already a different COA structure is defined, please ensure you properly amend Lookup Loads and Lookup Value loads

Step 9: Approvals

Please align the approvals preferences with the settings shown below. This model below uses an approval matrix without hierarchy. If hierarchy is targeted to be used, this needs to be amended after loading the approval chains.
clipboard_e3bce042244106e4eba8ec9cd41a043cb.png

Please load the approval chains from the file “09 Approval Chain Load”

Step 10: Default Presentation:

Configure the default presentation as shown below.

clipboard_e5da113f2de140584da27bd19bed95b9d.png

clipboard_ebdad3eb1fa982d4dee4f7e438cecf7d2.png

If you want to configure additional presentations, please ensure to follow the design above. For buyer presentations ensure that “Image Scan” is activated and at least in test also made mandatory. In supplier country presentations, ensure that “Image Scan” is deactivated when it’s a compliance presentation as in these cases Coupa generates the invoice PDF document and the supplier should not have an option to also add an original.

Step 11: Invoice Requester Access

The current model uses the granular requester control which should be configured as shown below. Please ensure that at this point in time the granular control does not work for delegates. If this is needed in the interim, the “edit invoice as approver” settings must be enabled in the user role, which will lead to some disadvantages that need to be taken in account. (see article on “Granular Control”)

clipboard_ed42996a766be162d59384ddabccbc4f0.png

clipboard_e404da0913caa0f1fa0ea25071c254891.png

Step 12: Company Information

Open Company Information and ensure that the settings are aligned as shown below. If settings appear in your release that are not shown in the screenshots, please leave them untouched.

clipboard_e2c929613b48922c46aaad72af46c591f.png

clipboard_e6280d556c00000318344aef9f1b50e84.png
clipboard_e56c58ac6accdb00312c76601725f5c90.png

Step 13: Integration Requirements on Objects imported:

 

  1. User
    Every User needs the field Region filled with the country the user belongs to, e.g. DE, GB, FR, CH etc.
  2. Suppliers
    Every supplier needs the Field COA Content Group to be filled with the cost center this supplier is assigned to. Multiple values can be comma separated. Eg. DE01, AT02, CH03. This allows suppliers only to be usable in invoices that they are extended to.
    In addition it makes sense to have a content group for every cost center and load these ones too, so the suppliers only appear in the respective areas.
  3. Commodities
    In every commodity a default “GL Account” needs to be filled to preset the GL in voices. This is the ref code of the GL needed in there.
  4. Lookup Values
    • CostObject Owner is the approver for the related cost object. This is the name of the user to approve
    • CostObject Owner Supervisor is the hierarchy approver for the cost object, this is e.g. used when the Owner does not have enough approval limit, or when the Owner is also the requester to allow 4-eye principle
    • Region is the country the cost object belongs to, e.g. DE, GB, FR, CH etc. The region allows to separate processes based on the accounting information selected.
    • Type can be loaded with additional data that is needed in approval processes, e.g. for GL’s that are only allowed to be posted against a profit center, the Type field can be used to indicate such rules.
    • Workflow Validation Value repeats the value in the Reference Number and is used in workflows to compare specific values.

Step 14: Integration Requirements on Objects Exported:

  1. Pre-payments
    in the pre-payments dropdown specific invoice handlings can be defined by the AP team that need to be mirrored in a different posting behavior when the invoice is created in the ERP via the OK2PAY file.
    • The value (1) will never be exported, the system forces the AP to select a different value than that.
    • The value (2) indicated a pre-payment, so posting an invoice against a interim ledger and not directly into actuals as for pre-payments there is no service or good provided yet
    • The value (3) indicates a final invoice. This posts against the accounting stated in the billing information but recommendation is to post this with a specific payment block to ensure that the money is not paid twice. AP can then in the ERP filter on this payment block and clear the final invoice against the pre-payments already paid. When done so, the payment block in ERP can be removed and outstanding liability will be paid.
    • The value (4) just triggers a normal invoice posting
    • The value (5) can be used to trigger a recurring payment. Please see this article LINK for a design that uses integration in case the ERP does not support this. With recurring payments additional fields are required.
    • Assets
      The Asset Tag field can be used to export this information with the invoice into the ERP system, but here it must be ensured that this can be properly booked and that if several tags are needed a proper mechanism is established how to enter the data. This needs to be reviewed based on the options of the ERP.

Configuration and Lookup Values

If in this guide a reference to a CSV file has been made, the file can be found in the attached documents, called "Mid Size Starter Pack CSV Load.ZIP".

Additional References

 

 

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